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Caraco Pharmaceuticals (CPD): A Generic Misunderstood Pharma

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July 15, 2010 – Comments (6) | RELATED TICKERS: CPD.DL2

 

Its been a few months since the original write-up (posted below), but we still feel CPD remains an attractive low-risk, high-return investment opportunity at the current price. Our guess is that the company is back in FDA compliance by the end of the year. 

Investment Analysis: CPD

6 Comments – Post Your Own

#1) On July 15, 2010 at 6:03 AM, TMFDeej (99.32) wrote:

Hey AAOI.  I never knew that you were on CAPS.  I love your blog and read it all the time.  Thanks for taking the time to post some of your write-ups here.  This site needs more fantastic investment ideas like the ones that you dig up.

See you around.

Deej 

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#2) On July 15, 2010 at 1:21 PM, AAOI (99.53) wrote:

Deej,

Appreciate the kind words and I am glad you enjoy the blog (keep em coming yourself). As far as digging for treasure, rest assured I'll be hard at work turning over as many rocks as possible.

That said, anything coming across your radar that is particularly attractive? As far as hunting grounds, I'm finding a lot of value in micro-caps, small financials in particular (primarily regionals like CRBC, FFNW, etc. and insurers such as Penn Miller). Same with almost anything GOM/deep water related (ATPG remains stupid cheap imho). I am sure its no surprise to you that I am also finding an abnormally large amount of value in high quality blue chips at the moment (BUD, PFE, VOD are some of our largest positions). Anything screaming your name?

Best,

AAOI 

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#3) On July 15, 2010 at 3:14 PM, TMFDeej (99.32) wrote:

I'm currently long VOD and PFE myself.  I like the former a lot more than the latter.  

The newest additions to my real-world portfolio are a couple of new REITs that have yet to lever up, GOV and ROIC.  If I was forced to put new month to work right now, I'd probably put it there.

I still like CVS, though that one hasn't played out well thus far.

Deej 

 

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#4) On July 15, 2010 at 3:28 PM, TMFDeej (99.32) wrote:

BTW CPD is a cool story.  I am definitely keeping my eye on this one.  I just added it to my CAPS portfolio, giving credit where credit is due of course :).

Deej 

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#5) On July 15, 2010 at 4:11 PM, AAOI (99.53) wrote:

Nice! Regarding CPD, the company is definitely a unique animal...it's definitely one of those opportunities where the deeper I dug, the more and more attractive it became (thankfully most miss a lot of the nuances that really make the company one of a kind).

As far as VOD is concerned, agreed (although in fairness PFE certainly has its fair share of virtues). After all, it's not every day one gets to purchase a stable, competitively entrenched franchise at a mid teens FCF yield - especially when that FCF yield will in all liklihood grow at a mid single digit rate going forward. Of course, getting paid roughly 6% to wait while the market comes to its senses isn't to shabby either :).

I definitely like both GOV and ROIC, although I haven't put any money into either in real life (that said, they certainly have a place in the on deck circle - for the moment though I think I have enough portfolio wide exposure to RE in general).  

If you have the time, take a look at CFW. I think the odds of Resaca getting the financing in order at some point over the next few weeks (to close the acquisition) is north of 50%...if not, even in the very unlikely event they file for bankruptcy, I think investors are likely to double their money (assuming an orderly liquidation).  

AAOI 

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#6) On July 16, 2010 at 8:00 AM, TMFDeej (99.32) wrote:

Thanks for the CFW tip.  I'll definitely check it out.

Have a great weekend.

Deej 

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